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      Australia's Private Sector Growth Slows as Manufacturing Contracts

      Australia's private sector growth has slowed to its weakest pace of the third quarter in September, according to preliminary survey data from S&P Global. The S&P Global Flash Australia Composite PMI Output Index fell to 50.8 from 52.7 in August, indicating only slight growth. While services activity remained the primary source of growth, it expanded at a slower rate, with the services index dropping to 51.4 from 53.2. Manufacturing, however, experienced a significant contraction, with the manufacturing PMI declining to 49.3, marking its first sub-50 reading since March and the sharpest factory output decline in 21 months.

      The slowdown in growth is attributed to softer demand, with new business rising at its slowest pace in three months. Manufacturing orders saw a renewed drop, and new export orders fell for the fifth time in six months. Additionally, private sector employment decreased for the first time in four months, with job losses noted across various sectors. This decline was the steepest since October 2020, highlighting the challenges faced by businesses in the current economic climate.

      Despite the contraction in manufacturing and job cuts, input cost inflation rose to a three-month high, driven primarily by energy and fuel costs linked to the ongoing conflict in the Middle East. Output prices also increased at a faster pace than in August, although inflation rates remain below those observed in the second quarter. Business confidence has dipped to a three-month low, with firms expressing concerns over costs and demand as they prepare for the Reserve Bank of Australia's upcoming policy decision on 29 September, where a rate hike is widely anticipated.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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